Michael Glimcher, chairman & CEO, Mark Yale, executive vice president, CFO & Treasurer and Melissa Indest, senior vice president, finance and accounting are presenting for Glimcher Realty Trust at NAREIT's REIT Week.
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Below are notes from the session:
11:48: Glimcher: We're coming off ICSC convention and it's an interesting time. ... It's really the first time where we've seen some nice pricing pressure and a lack of development. ... Retailers are concerned about getting space. Saw positive leasing spreads--expect 5 to 10 percent for the year. We have a sales goal of $400 per square foot goal. ... We're feeling good about the portfolio and that we're upgrading it. ... We've got significant lease roll and bringing in higher-quality tenants. ... What's really interesting is not just the Pearl Ridges, Scottsdale or Polaris ... we're seeing across the portfolio leasing activity. We're seeing inline activity and good anchor activity.
11:50: Glimcher: We're feeling good about the fact that it's not just the top of the portfolio. With positive 1 percent NOI, with positive releasing spreads ... the fundamentals keep getting better and the performance of the Glimcher portfolio keeps getting better.
11:53: Glimcher: (Responding to question about acquisition environment.) There are several opportunities on the market. There are two buckets. There are large groups of B or B- assets that are properties that are historically what we would be associated with that today don't fit where we're going. … The volume of what's out there, we're not looking at. … There are a few opportunities—less than a hand—with aggressive pricing (low single-digit cap rates) that might make sense. We could go alone or go with a joint venture. … There are few opportunities and a lot of people looking and you don't know if the pricing is going to be beyond what you're comfortable with.
12:04: Glimcher: (Responding to question about leasing activity and internal growth prospects.) In normalized times, we look at our leasing activity—2/3 is new deals and 1/3 renewals. When things were absolute worst, it was 1/3 new deals and 2/3 renewals. This year it is about 50/50. … I think we have a benefit of Polaris Center is on a 10-year anniversary and added an Apple, which will boost sales $50 per square foot overnight and that will benefit the center.
12:05: Yale: In 2008-2009, there was a lot of rent relief that we will now be able to recapture.
12:11: Yale: Our overall leverage—that gets into how you value assets. We are focused on debt-to-EBITDA. We are looking at 7X or 8X and would like to eventually migrate to 7X.
12:13: I think monikers have become much less important. It's more about having a critical mass of great retail. We are doing a number of box deals in our enclosed regional malls. Part of it is that new power centers aren't being built. Part of it is (coming from tenants). Part of it is that power center developers don't want to put money into the box. … So there are a lot of things that are driving it. So we are seeing across the portfolio a lot of box activity—Dick's Sporting Goods, Ulta are very active. … It's about where are the people, what are the retailers there and what kind of business can they do?
Session ends. We're heading into the lunch break now. The remaining live blogs for today will be some of the big regional mall players: Macerich at 2:15 PM, Simon Property Group at 3:00 PM and PREIT at 3:45 PM.
(There was a lot of discussion about the Scottsdale, Ariz., market and Glimcher's Scottsdale Quarter that did not include in this live blog.)